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Debt and Other Financing Arrangements
 3 Months Ended
Apr. 02, 2022
Debt Disclosure [Abstract]  
Debt and Other Financing Arrangements [Text Block]
Note 7.    Debt and Other Financing Arrangements
Effective interest rate at April 2,April 2,December 31,
(Dollars in millions)202220222021
Commercial Paper0.16 %$1,852 $2,522 
Floating Rate (SOFR + 0.35%) 1.5-Year Senior Notes, Due 4/18/2023
1,000 1,000 
Floating Rate (SOFR + 0.39%) 2-Year Senior Notes, Due 10/18/2023
500 500 
0.797% 2-Year Senior Notes, Due 10/18/2023
1.04 %1,350 1,350 
Floating Rate (EURIBOR + 0.20%) 2-Year Senior Notes Due 11/18/2023 (euro-denominated)
0.00 %1,877 1,933 
0.000% 2-Year Senior Notes Due 11/18/2023 (euro-denominated)
0.06 %607 625 
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)
0.94 %1,104 1,137 
1.215% 3-Year Senior Notes, Due 10/18/2024
1.42 %2,500 2,500 
Floating Rate (SOFR + 0.53%) 3-Year Senior Notes, Due 10/18/2024
500 500 
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)
0.41 %883 910 
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)
2.10 %707 728 
0.000% 4-Year Senior Notes, Due 11/18/2025 (euro-denominated)
0.15 %607 625 
3.65% 10-Year Senior Notes, Due 12/15/2025
— 350 
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)
1.53 %773 796 
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)
1.65 %552 568 
1.75% 7-Year Senior Notes, Due 4/15/2027 (euro-denominated)
1.97 %663 682 
0.50% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)
0.77 %883 910 
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)
1.46 %663 682 
1.750% 7-Year Senior Notes, Due 10/15/2028
1.89 %700 700 
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)
2.08 %773 796 
2.60% 10-Year Senior Notes, Due 10/1/2029
2.74 %900 900 
0.80% 9-Year Senior Notes, Due 10/18/2030 (euro-denominated)
0.89 %1,933 1,990 
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)
1.13 %994 1,023 
2.00% 10-Year Senior Notes, Due 10/15/2031
2.23 %1,200 1,200 
2.375% 12-Year Senior Notes, Due 4/15/2032 (euro-denominated)
2.55 %663 682 
1.125% 12-Year Senior Notes, Due 10/18/2033 (euro-denominated)
1.20 %1,656 1,706 
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)
2.94 %773 796 
1.50% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)
1.73 %994 1,023 
2.80% 20-Year Senior Notes, Due 10/15/2041
2.90 %1,200 1,200 
Effective interest rate at April 2,April 2,December 31,
(Dollars in millions)202220222021
1.625% 20-Year Senior Notes, Due 10/18/2041 (euro-denominated)
1.77 %1,380 1,421 
5.30% 30-Year Senior Notes, Due 2/1/2044
5.37 %400 400 
4.10% 30-Year Senior Notes, Due 8/15/2047
4.23 %750 750 
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)
1.98 %1,104 1,137 
2.00% 30-Year Senior Notes, Due 10/18/2051 (euro-denominated)
2.07 %828 853 
Other 76 76 
Total borrowings at par value
33,345 34,971 
Unamortized discount
(112)(117)
Unamortized debt issuance costs
(173)(184)
Total borrowings at carrying value
33,060 34,670 
Finance lease liabilities
195 200 
Less: Short-term obligations and current maturities
1,866 2,537 
Long-term obligations$31,389 $32,333 
SOFR - Secured Overnight Financing Rate
EURIBOR - Euro Interbank Offered Rate
The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discounts/premiums and the amortization of any debt issuance costs.
See Note 10 for fair value information pertaining to the company’s long-term borrowings.
Credit Facilities
The company has a revolving credit facility (the Facility) with a bank group that provides for up to $5.00 billion of unsecured multi-currency revolving credit. The Facility expires on January 7, 2027. The revolving credit agreement calls for interest at either a Term SOFR, a EURIBOR-based rate (for funds drawn in euro) or a rate based on the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The covenants in the Facility include a Consolidated Net Interest Coverage Ratio (Consolidated EBITDA to Consolidated Net Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.5:1.0 as of the last day of any fiscal quarter. As of April 2, 2022, no borrowings were outstanding under the Facility, although available capacity was reduced by approximately $4 million as a result of outstanding letters of credit.
Commercial Paper Programs
The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of April 2, 2022, outstanding borrowings under these programs were $1.85 billion.
Senior Notes
Interest is payable quarterly on the floating rate senior notes, annually on the euro-denominated fixed rate senior notes and semi-annually on all other senior notes. Each of the fixed rate senior notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. Except for the euro-denominated floating rate senior notes, which may not be redeemed early, the floating rate senior notes may be redeemed in whole or in part on or after their applicable call dates at a redemption price of 100% of the principal amount plus accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which
limits the ability of the company to pledge principal properties as security under borrowing arrangements. The company was in compliance with all covenants at April 2, 2022.
In February 2022, the company redeemed all of its 3.650% Senior Notes due 2025. In connection with the redemption, the company incurred $26 million of losses on the early extinguishment of debt.
Thermo Fisher Scientific (Finance I) B.V. (Thermo Fisher International), a wholly-owned finance subsidiary of the company, issued each of the Floating Rate Senior Notes due 2023, the 0.00% Senior Notes due 2023, the 0.00% Senior Notes due 2025, the 0.80% Senior Notes due 2030, the 1.125% Senior Notes due 2033, the 1.625% Senior Notes due 2041, and the 2.00% Senior Notes due 2051 included in the table above (collectively, the “Euronotes”) in registered public offerings. The company has fully and unconditionally guaranteed all of Thermo Fisher International’s obligations under the Euronotes and all of Thermo Fisher International’s other debt securities, and no other subsidiary of the company will guarantee these obligations. Thermo Fisher International is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes and other debt securities issued by Thermo Fisher International from time to time. The financial condition, results of operations and cash flows of Thermo Fisher International are consolidated in the financial statements of the company.